Insurer Says Data Breach Coverage Barred For Unaffected Co.

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By Ganesh Setty (March 3, 2022, 4:54 PM EST) — An IT services provider cannot win coverage for losses stemming from the termination of six of its clients’ business relationships following a data breach if the breach did not cause interruptions to its own services, the company’s insurer argued to a Connecticut federal court.

Citizens Insurance Co. of America said in a memo supporting its motion for summary judgment on Wednesday that the work of its insured New England Systems Inc. “continued unabated despite the data breach.” That alone is sufficient to bar business interruption coverage to NSI under its policy, Citizens said, urging the court to toss NSI’s remaining claims…

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